subject: Debt Management Companies - Take The Hassle Out Of Your Debt Problems [print this page] When it comes to finances, sometimes it's easy to get in too deep, find yourself deep in debt, and not know how to get out of the situation. If it gets to be too much, it may be a good idea to get professional help. Debt management companies can be the answer to get you back on your feet, whether you're just beginning to get into trouble and don't think you need help, or even if you're overwhelmed and on the verge on bankruptcy.
The role of a debt management company is to work with you and your creditors to make your debt more manageable and keep you from bankruptcy. Types of debt that qualify are medical bills, student loans, credit card bills, utility bills, IRS debt, and various other kinds of unsecured debt. They can also provide "credit repair" services, or help fix mistakes on your credit report.
A debt management company will do several things for you. For starters, they will study your financial situation and work with you to create a monthly budget. That budget will include a set dollar amount that will be deposited into a special account to make payments on your debt. Counseling about income and dept management is a part of the services, and they should provide you with a DMP, or "debt management plan" as part of that service.
The debt management company will contact your creditors and work out a repayment plan. Creditors will often lower monthly payments, waive late fees, and lower interest rates to make it easier to repay your debt. The creditors are then paid monthly, semi-monthly, or even weekly from the debt repayment account.
When a debt management company goes to work for you, they can stop collection agencies and creditors from harassing you. Creditors are usually more than happy to work with a debt collection company because then they know they will get paid.
Be careful when choosing a debt management company. Make sure they are accredited or listed with the Better Business Bureau in the company's area, and examine their fee structure and service agreement. Shop around and ask for referrals. Keep in mind that Not-For-Profit doesn't mean the company doesn't make money from your business; it only means they don't pay taxes. Finding the right company can make debt management a relief rather than a nightmare.
Debt Management Companies - Take The Hassle Out Of Your Debt Problems
